As the required scale and pace of climate transition sharpens, cities must go beyond traditional public funding and act as catalysts for relevant investment. Bristol is responding to this challenge by building the institutional infrastructure and capabilities to direct capital toward climate action that is place-based, inclusive, and scalable. Central to its NetZeroCities Pilot Activity is the Net Zero Investment Co-Innovation Lab: a space for testing new financing mechanisms, reshaping internal governance, and forming partnerships that can unlock systemic investment.
From July 2023 to June 2025, the Lab designed and launched three new financial products, alongside building capacity and alignment across council teams and beyond. The pilot repositions Bristol not just as a project implementer, but as a strategic orchestrator of capital.
The Lab established three innovative finance methods and created related capacity:
A Community Climate Investment Scheme
The Bristol Climate Action Investment is publicly available via an investment platform developed by project partner Abundance Investment. Designed to give residents and businesses the opportunity to invest directly in local climate projects, it was shaped through engagement with the Community Leadership Panel on Climate and Just Transition. Its structure, with an accessible platform and a £5 minimum investment, lowers barriers to entry while building local ownership of the transition and, crucially, making citizens aware of what climate action looks like in practice through a highly successful and disruptive advertising campaign.
Green Growth West Fund
Green Growth West Fund is a new £100m regional impact fund being established in the West of England and wider South West, with a £10m cornerstone investment from the West of England Mayoral Combined Authority. In partnership with specialist fund manager Amber Infrastructure and leading regional impact investor and Lab project partner BBRC, it is designed to invest in the region's mid-scale infrastructure and growth-ready businesses, helping them seize the opportunities of the net-zero transition. It aims to address an identifiable market need for growth finance faced by small and medium-sized businesses in the region. As a result, the Fund could supercharge the region's renewable energy, low-carbon transport, and nature recovery efforts.
Carbon Multiplier Fund
Originally intended as a planning policy tool enabling developers to compensate for carbon impacts through local contributions, the Carbon Multiplier Fund has faced delays due to national policy changes. While temporarily paused, the concept remains under development, signalling the city's intent to innovate within existing regulatory frameworks.
Community Programme
The Lab ensured the inclusion of the voluntary and community sector by working with them, via project partner Bristol Climate and Nature Partnership, to understand their needs and develop a case for investable projects. Case studies were combined to form the novel Community Climate Action prospectus, which shows the potential for community-led climate action to improve quality of life. Subsequent research explored the potential for a Community Climate Action Fund to enable corporates to fund local community-led climate and nature action projects.
Advisory Infrastructure
An advisory group was established to guide the Lab's financial product design and consider what other products were needed. It includes stakeholders from local and national finance institutions, pension funds and academia, joining technical complexity with municipal accountability and legitimacy.
The Lab draws on Bristol's legacy of innovation in civic finance, including the Bristol City Leap £1 billion decarbonisation partnership and the associated Community Energy Fund, which has already raised around £1.5 million to support community projects.
What were the key drivers of the initiative?
- A clear strategic mandate: Bristol's One City Climate Strategy and Just Transition Declaration provide high-level direction and legitimacy for the Lab's focus.
- Political endorsement and governance reform: The Bristol Climate Action Investment had strong cross-party political support but required an amendment to the Council's Treasury Management Strategy to enable the city to deploy and use new finance methods.
- Established foundations in climate finance: Prior initiatives, such as Bristol City Leap and Abundance-issued community municipal investments, offered tested models and investor confidence.
What were the challenges and barriers?
- The complexity of financial innovation: Designing investment products that satisfy community priorities, financial regulations, and risk-return thresholds requires resources to be set aside for inclusive design, utilising diverse and professional expertise. The co-creation of the Bristol Climate Action Investment with a broader group of stakeholders, including community members, ensured alignment with local needs and helped define social value beyond carbon metrics.
- Capacity and bandwidth: Municipal teams must prioritise managing investor relations, community engagement, and legal compliance alongside core service delivery. Additionally, it should be anticipated that election cycles may affect the timeline for product approvals and launch windows.
- Developing others' capacity: A review of 300 local projects identified only about 30 as potentially investable, underlining the need for capacity-building among project developers and more blended finance tools. Future efforts must focus on providing technical assistance, building capacity within organisations to achieve equitable participation, and establishing matchmaking platforms.
Potential for Replication
Bristol's Lab offers replicable finance methods and early but concrete lessons for other cities seeking to develop their own local climate finance ecosystems:
- Cities can design and deploy multi-instrument finance systems, using advisory groups and internal reform to take a more strategic role in directing capital.
- Strategic alliances with professional organisations and cross-team collaboration are key to success. A shared language and practice between finance, planning, legal, energy, and climate professionals increases agility and decision-making quality.
- Civic finance is viable when products are co-designed and tailored to public understanding and values, employing transparency and consistent communication.
Bristol's experience demonstrates that even without devolved fiscal powers, local authorities can act as stewards of investment by establishing the governance structures, relationships, and instruments necessary to align resources with their mission.
Header Photo: Nick, CC BY 2.0, via Wikimedia Commons